On Wednesday 13 January 2016, a cross section of our clients based in Singapore joined our Disputes and Corporate Crime & Investigations teams and Bankim Thanki QC, a leading commercial advocate and litigator who has practised extensively in the region and the editor of The Law of Privilege (Oxford), for a roundtable discussion on the preservation of privilege.

In this e-bulletin, we summarise some of the key issues discussed in relation to privilege and its preservation, and practical suggestions coming out of those discussions.

1. Background

Privilege is a concept derived originally from English common law and typically found in common law jurisdictions. It does not exist in all jurisdictions in the region, with most civil law based jurisdictions such as Indonesia, Thailand and China not recognising the concept to the same extent as in common law jurisdictions such as Singapore or Hong Kong. Our guide to Privilege in Asia Pacific (3rd ed. 2014) provides a more detailed overview on the differing approaches to privilege in the region.

The two main categories of privilege are legal advice privilege and litigation privilege. Litigation privilege is of broader scope (i.e. it covers communications between the client or his lawyer and a third party) but is only available when a dispute is in reasonable prospect and the communication is entered into for the dominant purpose of the dispute. On the other hand, legal advice privilege only applies to communications between a lawyer and a client for the purpose of giving or obtaining legal advice.

Importantly, it is not settled whether and to what extent regulatory investigations are to be considered to be sufficiently adversarial to attract litigation privilege, and it may therefore be safer to be able to rely on legal advice privilege in the context of investigations. This is even more relevant to internal investigations that are often conducted to deal with a complaint or to improve systems and controls and not for the purpose of an adversarial process.

2. Internal investigations

Internal investigations are usually conducted by non­lawyers (e.g. the HR team), with interview notes or investigation reports being forwarded to in­house counsel or directly to management for further consideration. To what extent can privilege be asserted over the work product?

  • An internal investigation conducted by non­legal staff without the involvement of internal or external lawyers will not attract privilege. In order to attract privilege there needs to be substantive involvement of a lawyer. It will generally not be sufficient simply to copy a lawyer into the communication. The communication needs to be addressed to or from the lawyer for the purpose of seeking legal advice or getting instructions.
  • In Singapore and Hong Kong, communications with in­house counsel attract the same protection as those with external counsel, reflecting the well­established English common law position. This is different in Malaysia (in relation to legal advice privilege) and less clear in India.
  • Interview notes prepared by non­legal staff are unlikely to attract privilege and will not be protected from disclosure, for example, in proceedings brought by an employee (e.g. for unfair dismissal) or a regulator. It is therefore prudent to keep any interview notes as factual as possible and to avoid including comments, opinions or conclusions. Alternatively, in particularly sensitive cases, the ability to assert privilege will be enhanced where the interview is conducted and the note is taken by an internal or external lawyer because the courts will be readier to infer that the overall purpose was for the lawyer to obtain appropriate factual instructions/information so as to advise the client.
  • An investigation report produced by non­legal staff and sent to management for further consideration (without the involvement of Legal) would not be privileged as there would be no client­lawyer communication and no legal advice would be sought or given.
  • However, where the report is provided to in­house counsel, privilege should apply if such a report is in the form of a memo or communication addressed to in­house counsel seeking legal advice.
  • The position is even more straight­forward if the report is prepared by internal or external counsel in the form of legal advice to the client.

3. Internal information gathering for the purpose of obtaining legal advice

To what extent are internal communications between non­legal employees privileged where they are entered into for the purpose of gathering information to enable the client to seek legal advice from his internal or external lawyer?

  • Both Singapore and (more recently) Hong Kong case law have taken a different approach from English case law to the question of whether internal information gathering for the purpose of seeking legal advice may attract legal advice privilege. The English Court of Appeal in Three Rivers District Council v Bank of England [2003] EWCA Civ 474 (“Three Rivers”) adopted a very narrow definition of “client” and only applied legal advice privilege to communications entered into between the lawyer and a small circle of representatives tasked with instructing the lawyer.
  • Although most of the relevant remarks are obiter, the Singapore Court of Appeal in Skandinaviska Enskilda Banken AB (Publ), Singapore Branch v Asia Pacific Breweries (Singapore) Pte Ltd and Other Appeals [2007] SGCA 9 (“Skandinaviska”) has indicated that it is minded to follow Australian case law and to include communications with third parties (here an external accountant) within the ambit of legal advice privilege as long as the communication is entered into for the dominant purpose of seeking legal advice. Although the court had no reason to consider communications entered into between employees of the client company, there is no reason to see why the same reasoning would not apply in relation to such “preparatory” internal communication as long as it can be shown that it is part of the process of gathering information for the purpose of seeking and obtaining legal advice.
  • The Hong Kong Court of Appeal in Citic Pacific Limited v Secretary for Justice and Commissioner of Police (unrep, 29/06/2015, CACV 7/2012) (“Citic”) was even clearer and expressly found that such internal client communication will be protected by legal advice privilege. For further information on this key decision, see our bulletin here.
  • It will help to demonstrate that internal communication was entered into for the dominant purpose of seeking legal advice where it is preceded by a request from the lawyer to collect the relevant information and the communication is labelled with the words “privileged, for the purpose of obtaining legal advice” or similar. Although the courts will not be bound by such language and will always consider the substance, rather than the form, such words will be taken into account by the courts and will at least flag internally the need to consider whether the communication can and should be withheld.

4. Waiver of privilege as a result of disseminating legal advice internally or sharing it with third parties

  1. Is privilege lost if legal advice is shared with the counterparty in a transactional negotiation setting?
  2. Is privilege lost if legal advice is stored in a location widely accessible by staff (such as a shared network folder)?
  3. Is privilege lost if advice is shared with other group companies?
  4. Is privilege lost where legal advice is disseminated within the company for the purpose of putting the advice to effect?
  5. Is privilege lost if legal advice is shared with regulators?
  • The general rule is that privilege is maintained provided the document in question is shared in confidence for a limited purpose and with an appropriately limited number of people. To ensure that any dissemination does not go too far, resulting in a loss of confidentiality, it is advisable that dissemination is controlled by in­house counsel or by establishing a communication protocol.
  • The concept of limited or “partial” waiver is recognised in English and Hong Kong law, and there is recent case law that suggests that Singapore courts are likely to take a similar view (Re Vanguard Energy Pte Ltd [2015] 4 SLR 597). This means that where privileged material is shared with a regulator or the counter party in a transaction, or any other third party, and it is made clear that it is shared in confidence for a limited purpose only, this should not result in a wider loss of privilege in collateral documents or in relation to the "wider world".
  • Although an obligation of confidence can be implied as well as express, it is advisable to make it clear in writing that the information is shared in confidence, for a limited purpose only (spelling out what that purpose is) and should not be shared with others.
  • However, even where all this is made clear to a regulator there is a risk that the regulator may be compelled to share the information with other regulators (in other countries) in light of the drive for increased cooperation and information sharing between regulators and law enforcement agencies both nationally and internationally.
  • In the case of sharing information with a transactional counter party there is a practical risk that the privileged information may be seized or disclosable in the hands of the counter party, in particular where the counter party is located in a (civil law) jurisdiction that does not acknowledge privilege.
  • Although it is never advisable to circulate privileged material too widely as it will increase the risk that it will be circulated further resulting in a loss of confidentiality, sharing legal advice with a group company in confidence or circulating it amongst staff on a need to know basis for the purpose of putting the legal advice to effect should not result in a wider loss of privilege.
  • Note however that any subsequent discussion of what to do in light of the advice received which does not reveal the underlying advice is less likely to attract privilege.
  • Saving privileged material on a server that is widely accessible bears the risk that confidentiality, and therefore privilege, may be lost. In the most extreme case it may be argued that the fact that privileged material is stored in a widely accessible location suggests in itself that it is not sufficiently confidential to attract privilege. Even if this view is not taken, there is a risk that the material is accessed and disseminated (possibly inadvertently) by staff who have access to the server.
  • Where staff who have access to the server (which may be located in another country) are located in a jurisdiction that does not acknowledge privilege or where enforcement agencies have very wide powers to seize documents, there is a risk that enforcement agencies in that country may seize the documents through the employee's access.
  • It is therefore advisable to put protections in place to ensure that privileged information is not widely accessible and is stored in a protected location in a jurisdiction that accepts privilege (e.g. through the use of password protections or other limited access rights).